A Darden Professor’s Guide to Creating ‘Cool’

Lalin Anik - Cool
(Illustration by Alex Angelich, University Communications)

James Bond sipping a martini.

Beyoncé dropping her latest album and creating an internet sensation.

A young hipster grabbing cold brew coffee from the corner shop or scouring the internet for the perfect pair of shoes.

All of these are examples of the power of “cool” – that indescribable mystique that holds so much cultural capital. Most people, and nearly every brand, want to be cool. But how do they get there?

University of Virginia Darden School of Business professor Lalin Anik can help.

Anik, whose research focuses on marketing and consumer behavior, wanted to understand more about what makes a product cool and how brands capitalize on that. Along with Darden graduate Johnny Miles and Ryan Hauser, an MBA candidate at the Yale School of Management, she authored an article, “A General Theory of Coolness,” and a case study on the topic, both through Darden Business Publishing.

The case study, in fact, centers on Mr. Bond and a partnership with Heineken that swapped the superspy’s signature martini for the Dutch beer in the 2012 franchise film, “Skyfall.”

“James Bond could be seen as an archetype of cool,” Anik said. “I was curious about how characters or brands like that create coolness, and if a partnership with Heineken – which does not really fit the Bond image – could change that.”

The Heineken partnership does not appear to have hurt “Skyfall” too much. It hit more than $1 billion in global ticket sales and was one of the highest-grossing films in the history of Sony Pictures. But it gave Anik, Miles and Hauser plenty to think about.

Anik explains more below.

Q. What defines coolness?
A. We identified three traits that are indispensable to coolness: autonomy, authenticity and attitude. Autonomy, arguably the most important dimension of coolness, refers to a lack of conformity or conventionality – being seen as independent or rebellious. Authenticity is simply being seen as true to one’s personality or, in the case of a brand, true to a mission or purpose. Attitude refers to that catch-22 of being cool without seeming as though you are trying to be cool. This is a challenging one for brands.

Finally, a fourth trait – association – is not essential to coolness, but it’s certainly helpful. That refers to association with a particularly cool brand, place or person – such as a celebrity spokesperson.

Q. What are some pitfalls companies or brands might encounter when they are trying to be cool?
A. There are certain norms that consumers see as illegitimate, and breaking those norms can work in a company’s favor. Breaking more legitimate norms, on the other hand, is less helpful.

Virgin Airlines is a good example of this. They broke away from the normally strict, businesslike tone of airline messaging by being animated and funny, while staying squarely within safety regulations and other norms that consumers are understandably concerned about.

In order to work, the product needs to be at least as functional as the mainstream norm. For example, spherical water bottles might seem cool, but they are impractical to hold and carry. We don’t need our Q-tips, Band-Aids or table salt to be “cool” – we just need those products to function well.

Additionally, brands should avoid excessively threatening consumer identity. Products that diverge too much from the norm could be seen as too embarrassing or rebellious. Possible examples include Romphim, a company selling one-piece rompers for men; Redneck Boot Sandals, which combine flip flops and cowboy boots; or Topshop’s clear plastic jeans. These types of cringe-worthy products that are wildly but unnecessarily creative remind us that not all marketing is good marketing.

Q. What are some examples of companies or brands that have managed to achieve and maintain coolness?
A. Adidas is one of those iconic brands that has all of the ingredients to maintain its cool over time. They are placing their stripes on world-class athletes while also instilling the consumer with nostalgia. Their Originals heritage line appeals to both Baby Boomers and vintage-loving hipsters.

There are other brands that are perceived to be cool because they operate in product and cultural categories that are appealing by nature, such as social media – i.e. Facebook and YouTube; technology – i.e. GoPro or Playstation; and athletics – i.e. Vans or Converse. The challenge these brands face is keeping up with ever-changing trends and fads while still being perceived as autonomous, authentic and having an attitude.

James Bond, of course, is an example of a franchise that is seen as perennially cool. Even the partnership with Heineken, which some derided, ultimately did not hurt Bond’s brand, and provided a boost for Heineken, thanks to that fourth factor of coolness – association.

Q. You cite Starbucks as one example in your article. What can Starbucks tell us about coolness?
A. It’s important to understand that coolness can change. That’s the tough thing about it for companies – it’s ephemeral and dependent on new generations and on what is happening in the world.

When it started, Starbucks really taught people how to drink coffee and created this whole culture around the ritual of getting your morning coffee. Then, other brands jumped onto that bandwagon. Starbucks, once perceived as original, became mainstream. Now, it’s cool not to buy Starbucks, and many people are choosing local or niche brands instead.

Q. What are some examples of brands that have failed in the pursuit of cool?
A. The clothing company Hollister Co. suffered from a failure of authenticity in 2005, when they had to pay damages to surfer Rob Havassy after using more than 300 knockoffs of his signed boards to decorate their stores. They were trying to claim the coolness of surfing culture, but were ultimately called out and criticized as deceitful and inauthentic.

More recently, Domino’s “4 Realz” campaign, where numb3rs replaced l3tt3rs, Chevrolet’s press release made up of emojis, and TXT Cellar Wines’ wines with Gen Y-inspired names like “LOL!!! Reisling” are all examples of brands pandering to what they see as millennial language. These moves are often seen as forced or inauthentic, and millennials – who have grown up with the internet – are quick to spot this and reject it.

– by Lalin Anik (Professor at University of Virginia Darden School of Business)

Originally at https://news.virginia.edu/content/qa-darden-professors-guide-creating-cool

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What makes Marwaris so successful in business?

Marwaris

According to Thomas A Timberg’s book, The Marwaris: From Jagath Seth to the Birlas, there are seven secrets of Marwari businessmen which are still valid “and perhaps will remain so”.


1. Watch the money

Marwaris

There are two key functions performed by the Marwari business firms and business groups – strategic management of investment funds by moving them to where they are most productive in the long term and close financial monitoring of the enterprises in which they have a share.

It is perhaps the changes in Harsh Goenka and Kumar Mangalam Birla’s business styles that point to a dilution of finance-centric strategies in present times.


2. Delegate but monitor

Marwaris

Successful business have to learn how to delegate, otherwise the span of economic activity can engage in will be limited.

They also have to know when to intervene, fully aware that a decision to intervene is costly. Usually it is easier to replace an unsatisfactory executive rather than turn him around. Ineffectual executives and family members are gently moved out to cushy and uncritical positions.


3. Plan, but have a style and a system

Marwaris

This is somewhat ambiguous as we clearly see a transition from an intuitive style to a more systematic one. However, this may be, as some suggest, a product of the transition from business founders to inheritors.


4. Lead to expand and do not let the system inhibit growth

Marwaris

A key characteristic of successful businessmen is a drive to expand. Many forms have expansion in their mission statements but few implement it.


5. The right corporate culture

Marwaris

The firm or group must have a style which befits its market and the times. Changes or adjustments constitute one of the most difficult tasks.

Corporate culture in a firm is critical in inspiring loyalty, especially of competent managers. Financial incentives can go only thus far, and are sometimes counterproductive.


6. Don’t get blown away by fads

Marwaris

The shelf life of half the management fads is six months. Professors, including those from business schools, devise striking and attractive theories which bear no responsibility for success.

A responsible manager has to be more tentative and experimental in his approach. As any school debater knows, there are usually at least two sides to any question, even multiple sides as in the Anekantavada of Jain logic. The problem is to decide which is right in a given situation.


7. Do not miss new developments

Marwaris

Some businesses describe themselves as ‘knowledge businesses’. As a matter of fact, all are. The world’s oldest family businesses have had some very successful ventures and a lot of failed ones because of missed opportunities.

Originally at http://economictimes.indiatimes.com/slideshows/management-leaders/7-secrets-that-makes-marwaris-so-good-in-business/what-makes-marwaris-so-successful-in-business/slideshow/55223494.cms

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Why Microsoft and Everyone Else Loves Indian CEOs

Satya Nadella, CEO, Microsoft

With the appointment of Satya Nadella as chief executive officer, Microsoft has joined a growing club of multinational corporations run by Indian-born managers. The list includes Pepsi, Deutsche Bank, MasterCard, Adobe Systems, Diageo, London-traded consumer goods giant Reckitt Benckiser and semiconductor maker GlobalFoundries.

At first glance, the commonalities among Indian CEOs are not particularly informative. They’re all in their late 40s and early 50s, the age when a successful manager’s career can be expected to peak. All graduated from U.S. or U.K. universities in addition to their Indian schools — no surprise, since all of them were immigrants who needed a stepping stone into a new culture. Those of them who had management experience in India started out with global corporations, which is logical given that it would have been harder to make the leap to global prominence from one of the family-owned companies that comprise about two thirds of Indian businesses. At least three — Nadella, Adobe CEO Shantanu Narayen and Prem Watsa, who runs Fairfax Financial, the would-be savior of Blackberry — went to the same public school in Hyderabad, which experienced a technological boom around the turn of the century that included the establishment of Microsoft’s first development center outside the U.S. By the time the boom developed, however, all three were long gone from their hometown.

In other ways, the executives’ backgrounds diverge significantly. They come from different parts of India — Jaipur, where Deutsche co-CEO Anshu Jain was born, is 1,300 miles away from Chennai, the birthplace of Pepsi’s Indra Nooyi. A few of the CEOs — Nooyi, Ajay Banga of Mastercard, Ivan Menezes of Diageo — went to the Indian Institutes of Management, business schools set up by the Indian government since the 1960s to create a local management elite. Most did not. Some, like Nooyi, Narayen, Benckiser’s Rakesh Kapoor and Nadella, studied engineering. Others, like Jain, Menezes and MasterCard chief Ajay Banga, are economics and business graduates.

Yet there must be a reason why so many Indians, and not, say, Brazilians, Russians or Chinese, have made stellar corporate careers. The answer might be found in studies of the Indian management culture.

According to research from St. Gallen University in Switzerland, Indian executives are inclined toward participative management and building meaningful relationships with subordinates. “The leadership style traditionally employed in India fostered an emotional bond between superiors and subordinates,” the 2004 study said. “The feeling that the company genuinely cares for its employees, provided a strong bond of loyalty that went beyond financial rewards.”

In the “Indian club,” there are no executives known for a dictatorial management style. Nooyi says: “You need to look at the employee and say, ‘I value you as a person. I know that you have a life beyond PepsiCo, and I’m going to respect you for your entire life, not just treat you as employee number 4,567.'”

When Nadella replaced Steve Ballmer at the helm of Microsoft, his high standing with the company’s rank-and-file was cited as a major reason for his promotion.

A 2007 study by researchers at Southern New Hampshire University, which compared Indian managers to U.S. ones, found the South Asians more humble. It is not by chance that Nadella started his first e-mail to Microsoft employees as chief executive by saying, “This is a very humbling day for me.”

The study also found Indians to be particularly future-oriented, focused on long-term strategies. Narayen of Adobe says: “If you can connect all the dots between what you see today and where you want to go, then it’s probably not ambitious enough or aspirational enough”.

In his email, Nadella paraphrased an Oscar Wilde quote on the same point: “We need to believe in the impossible and remove the improbable.”

Perhaps most importantly, the Indian managers get to the top because they persevere. Most of those I mentioned had the patience to rise through the ranks at their companies, learning their business thoroughly from every angle. Nooyi joined Pepsi in 1994, Jain took his first job at Deutsche Bank a year later, Menezes has been with Diageo since 1997, Narayen was hired by Adobe in 1998, and Nadella’s appointment crowns a 22-year career with Microsoft.

There is nothing specifically Indian about empathy, humility, patience and an ability to dream. Yet it is these qualities that appear to have created the “Indian club” of overachievers in global business.

– by Leonid Bershidsky

Originally at http://www.bloombergview.com/articles/2014-02-05/why-microsoft-and-everyone-else-loves-indian-ceos

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Fri 21 Mar 14